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Highlights:
- Eco Animal Health warns full-year revenues will fall below expectations due to challenges in China and Southeast Asia.
- Strong performance in Brazil, India, and the US bolstered the company’s market share, with Aivlosin driving growth.
- The company remains optimistic about H2, citing improving pork prices in China and expansion into new markets like Paraguay.
Veterinary products group Eco Animal Health (LSE:EAH) issued a warning on Tuesday that its full-year revenues are expected to fall "materially below" market expectations, citing recent difficulties in key markets such as China and Southeast Asia. The company pointed to low disease incidence during the summer months in China and slower sales in Southeast Asia, driven by customer churn, as major contributors to the revenue shortfall.
Despite these challenges, Eco Animal Health noted strong performance in other regions. Its Aivlosin product has gained market share in key territories like Brazil and India, with revenues in these areas exceeding the board’s expectations. The company also continues to expand its presence in the US market, which remains a critical growth driver.
However, forecasting full-year adjusted EBITDA remains difficult due to the mix of geographies, foreign exchange headwinds, and differing gross margins across regions. Eco Animal Health said it anticipates that adjusted EBITDA for FY25 will be similar to that of FY23. More precise guidance is expected to be provided with the interim results in late November.
Looking ahead, the company expressed optimism for an improved second half, citing rising pork prices in China, strong order books, and continued strength in North America, Brazil, and India. Additionally, Eco Animal recently secured regulatory approval to market Aivlosin in Paraguay, a growing market with significant pig farming operations.
As of 1050 BST, shares in Eco Animal Health had dropped 18.04%, trading at 79.50p.
